Governance, Ethics, and Sustainability

Explore the concepts of governance, ethics, and sustainability in this comprehensive study material. Learn about economic, environmental, and social sustainability and their impact on businesses. Discover the importance of corporate sustainability and its benefits. Get insights into the methodologies and frameworks used for sustainability reporting. Gain knowledge about the challenges and management approaches for economic, environmental, and social sustainability. Find out how companies can promote social well-being and maintain relationships with stakeholders. Study the incidents and compliance issues related to sustainability.

GOVERNANCE, ETHICS AND
SUSTAINABILITY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Background..................................................................................................................................1
Methodology ...............................................................................................................................1
MAIN BODY...................................................................................................................................2
Economic Sustainability..............................................................................................................2
Environment Sustainability .........................................................................................................4
Social Sustainability.....................................................................................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Background
Sustainability could be described and meeting needs of present without compromising
ability of the future generations in meeting their need. There are mainly three types of
sustainability that are environmental, economic and social. They are also referred as three pillars
known planet, people and profit. Sustainability is growing issue among various investors who are
seeking social along with economic profits. With growth of the socially responsible ETFs and
funds corporate sustainability might add competitive advantage to bottom line of company.
Strategic decisions are taken by the extent and type of the corporate sustainability policies.
Businesses are required to establish the sustainability in business decisions as the process
could reap financial advantages and attracting more interest of investors that is key to the long
term profitability. It provides that company is not restricted only towards making profits but is
also concerned about the environment and society (Rezaee, 2016). It reflects positive image of
company in the market that provides recognition to the company and increases its revenues.
Sustainability report provides that organisation is considering the impacts of sustainability issues
and making company transparent over risks as well as opportunities they could face.
Methodology
GRI Standards – Increasingly investors, consumers and the key stakeholders expects firms to go
beyond the defined regulations and becoming pat of the the solutions for societal and
environmental issues. GRI is the international independent standard organisation helping
governments, businesses and the other organisations in understanding and communicating the
impact over issues like climate changes, corruption and human rights. The increasing pressure
from stakeholders groups like investors, consumers and the governments requires companies to
transparent over the economic, environmental and social issues and to publish sustainability
report. Frameworks of GRI helps company in identifying, gathering and reporting the
information comparable and clear manner (GRI Standards, 2020). GRI standards is structured set
of the interrelated standards. It has been primarily developed for helping organisations to prepare
sustainability report.
1

MAIN BODY
Economic Sustainability
It refers to the practices supporting long term growth of the economy of the without
having negative impact over social, cultural and environmental aspects of community. It
encompasses different financial cost & benefits. It economy of the country should be able to
support the defined economic level of production. There are different definitions for the
economic sustainability. It is defined as ability of economy in managing the scarce resources.
Difference between the ecological & social and economic sustainability is of economic structures
created by the man. Difference between the two is due to use of the different sustainability model
as starting point. Economic sustainability could be understood as economic development which
is not having negative impact over social or ecological sustainability (Ferro and et.al., 2017).
Increase of economic capital should not be done at expense of reduction in the natural or social
capital. Economic sustainability is often equated with the economic growth that is considered as
sustainable total total capital of the company increases.
Economic sustainability in the business refers about carrying out business operations and
activities responsibly & building bottom line without affecting the nearby environment. It
requires company to ensure that all business are part of the larger economy. Companies are
required to comply with all the policies and compliance procedures associated with the economic
sustainability. It costs high to company to comply with these social standards. Economic
sustainability impacts every part of the decision making for the expansions or growth prospects.
Companies face economic sustainability issues when the business is not having adequate grasp
for the risk management. Issues are faced in managing the risks associated with the economic
sustainability.
Description and Management Approach to the issue :-
Material Topic Description Management Approach
Disclosure 201-4
Financial
assistance
received from the
government
Company had the serious
issue of oil spills at the
warehouse at Chemora,
Queensland. The fuel spills
were spread around 8
This was a serious issue that could
have affected the company and to face
fines and penalties of high amount
from the environment authorities. To
rectify the mistakes company sprayed
2

kilometres from rupture in
fuel tanks in soil around the
base. Spill was directly
soaked in ground and affected
the fertility of the soil (Galea
ed., 2017). Federal
Government granted
company 15 million for the
research & development
activities. The grant was
provided for continuing
breakthrough research in the
biotechnology.
liquid hydrocarbon eating bacteria for
remediating the soil in affected areas.
The approach helped the company in
managing the serous issues. It shows
that the management is active in
resolving the issues faced by it and is
active in taking immediate steps to
remedy the contingencies caused.
Disclosure 203-1
Infrastructure
investments and
services supplied
It requires company to
disclose the investments
made by company related
with the infrastructures and
the services that are supplied
to the people. Company has
completed health & welfare
program of $10 million in
Dolan Bay. The centre is
established for social welfare
and involves considerable
amount.
The centre will be providing needed
support to the families who are
comping wit various social issues.
Services of the centre will be
providing free of cost. The initiative is
extremely worthful which
demonstrates clear commitment of the
company towards social well being
for those which are not fortunate in
community. Approach for social well
being shows that company has the
social concerns along with the motive
of earning profits (Ngai and et.al.,
2018). Operation of the centre will be
running from the proportion of profits
earned from business during the year.
Disclosure 204-1
Proportion of
It requires the company to
have proportion of spendings
The initiative of the company to give
the local suppliers opportunities of
3

spending on local
suppliers
that are required to assess the
business with the making
effective utilisation of the
resources. After the case of
child labour in Bangladeshi
supplier. It switched over to
local supplier in the
metropolitan area. This has
made the supplies from local
supplier to 75% of total
production. This provides
opportunities to local
suppliers to grow adding to
development of economy.
growing in market. Material provided
by new supplier is recyclable and
renewable that reduced the weight of
non renewable materials to 55 tonnes
and the weight of renewable resources
has raised to forty five tonnes. Total
weight for the recycled units of input
materials has raised to over 25 tonnes.
The initiative will make the company
highly recognised for the initiatives
taken for reducing the environmental
imbalance and reducing the pollution
from non renewable resources. Brand
recognition will help the company in
increasing its revenues.
Environment Sustainability
Environmental sustainability refers to every aspect of the lives. It is concerned about
making resources available for future generations by protecting and preventing the resources.
Companies are required to take responsibility for future generations. Resources used by the
company belong to the society and are scarce firms are required to ensure that the optimum
utilisation of the resources. They should be aware that resources are scarce and required to be
protected for the future generations. Adopting resources that are renewable is one of the measure
used by manufacturers for preventing use of renewable resources. Using materials that could be
recycled saves cost of company and also prevents environment exploitation (Rezaee and et.al.,
2019). Issues faced by the companies under environmental sustainability is maintaining and
protecting long term productivity of the resources to meet the social and economic needs. There
are certain operations that could not be operated without use of renewable resources.
Description and Management Approach to the issue :-
Material Topic Description Management Approaches
Disclosure 301-1 Materials used by the company The approach shows that management is
4

Materials used by
weight or volume
are 55 tonnes of non renewable
resources and the renewable
materials of company are 45
tonnes.
taking initiatives for reducing the use of
non renewable resources. This will reduce
the pollution of environment and list the
company in socially responsible. It will also
encourage other companies to take
initiatives towards accepting more of the
renewable resources though they cost bit
higher to company.
Disclosure 301- 2
Recycled Inputs
material used
Total weight of recycled inputs
is 25 tonnes. Use of recycled
inputs does not affect the
quality of goods and services
produced.
This shows that company is also using the
recycled inputs and using them into
production of goods. The quality of
products is not sacrificed due to the use of
recycled. It will encourage the companies
in making use of recyclable materials. This
protects environment from exploitation and
also reduces the cost of production of goods
and services (Sun, Wu and Yang, 2018).
Disclosure 306 –
3
Significant Spills
Oil spills in 8 kilometres from
the fuel tanks in rupture around
the base area has made the soil
infertile.
Company has spayed liquid hydrocarbon
eating bacteria in soil to remedy the spills.
This has damaged the soil to considerable
extent. Attempt of the company will help in
reducing the impact and loss caused to the
soil due to the oil spills. The measures of
the company shows that it is not careless on
the loss caused to the environment due to
the accidents and reason of company.
Social Sustainability
Social sustainability refers to framework or process promoting well being in the own
members supporting ability of the future generations for maintaining the healthy community. It
5

encompasses impact of the corporations over society and the people. It is overlooked aspect of
the sustainability. It is focused over creating the successful places which promote the well being
understanding what people are needing from places in which they are living and working. It
combines the design of physical realm along with design of social world. Infrastructure for
supporting cultural and social life, system for engagement of the citizen, social amenities and
space to places and people for evolving (Svensson and et.al., 2018). It is critical concern of the
company as they have to maintain relationship with the stakeholders.
Description and Management Approach to the issue :-
Material Topic Description Management Approaches
Disclosure 408-1
Operations and
suppliers at
significant risk for
incidents of child
labour
Supplier, Golden Goods ltd
which was engaged with
manufacturers in Bangladesh
which were employing child
labour for producing the
products. This was breach of
supply contract and company
terminated the contract with the
Golden Goods.
There was immediate breach of contract
with the Golden Goods which was engaged
with the manufacturers of Bangladeshi
manufacturing facilities. It could be
evaluated from the business that it does not
accepts the child labour and is strict against
the social concerns. It terminated the
contacted without giving thought on the
consequences if supplier with adequate
material fulfilling the need of company for
production.
Disclosure 412-2
Employee training
on human rights
policies or
procedures
It is providing training to its
employees over human rights
and has completed around 100
hours of the training over
aspects of human right. 35% of
the employees are already
trained over principles of
human right over gender
equality for human respect and
dignity.
Providing training to employees will allow
the company to make effective effective
interactions with its stakeholders such as
customers, employees, shareholders and
suppliers. It will enhance the customers
experience and portray positive image of
the company in society.
6

Disclosure 417-3
Incidents of non-
compliance
concerning
marketing
communications
It faced marketing
communications investigation
from ACCC. Results were
found of being engaged in
misleading and false conduct
(Oudah, Jabeen and Dixon,
2018). It faced infringement
penalty of $12600.
Company paid the fine and instructions
were given to update the marketing
policies for ensuring compliance with
consumer law provisions of Australia. The
advertisement was not communicated with
the intention of deceiving people regarding
the products of company.
CONCLUSION
From the above study it could be concluded that business sustainability has become
essential part of the business environment. Company is facing issues of disclosing the proper
expenditures incurred done towards the sustainability in three areas. It should disclose
expenditures in monetary terms to make people aware of the initiatives regarding sustainability.
It should disclose the clear expenditures and attempts towards complying with sustainability
standards.
7

REFERENCES
Books and Journals
Rezaee, Z., 2016. Business sustainability research: A theoretical and integrated
perspective. Journal of Accounting literature. 36. pp.48-64.
Ferro, C., and et.al., 2017. Validating a framework of stakeholders in connection to business
sustainability efforts in supply chains. Journal of Business & Industrial Marketing.
Galea, C. ed., 2017. Teaching Business Sustainability Vol. 2: Cases, Simulations and
Experiential Approaches. Routledge.
Ngai, E.W.T., and et.al., 2018. Business sustainability and corporate social responsibility: case
studies of three gas operators in China. International Journal of Production
Research. 56(1-2), pp.660-676.
Rezaee, Z., and et.al., 2019. Business sustainability in Asia: Compliance, performance, and
integrated reporting and assurance. John Wiley & Sons.
Sun, J., Wu, S. and Yang, K., 2018. An ecosystemic framework for business
sustainability. Business Horizons. 61(1). pp.59-72.
Svensson, G.,and et.al., 2018. Developing a theory of focal company business sustainability
efforts in connection with supply chain stakeholders. Supply Chain Management: An
International Journal.
Oudah, M., Jabeen, F. and Dixon, C., 2018. Determinants linked to family business sustainability
in the UAE: An AHP approach. Sustainability. 10(1). p.246.
ONLINE
GRI Standards. 2020. [Online]. Available through:
<https://www.globalreporting.org/standards/>
8